Unemployment develops, that is to say, because people want the moon;--men cannot be employed when the object of desire (i.e. money) is something which cannot be produced and the demand for which cannot be readily choked off. There is no remedy but to persuade the public that green cheese is practically the same thing and to have a green cheese factory (i.e. a central bank) under public control.Well, perhaps Keynes should have been a tad more explicit... Unemployment is a consequence of a system of exchange based on money. But why money? Because money is created by banks through issuing loans that bear interest. People want the moon -- they want money -- because unlike most other objects of desire, it (seemingly) gets bigger all by itself. Just buy a bond and watch it grow.
For Keynes, what differentiates a monetary economy from a real wage (barter) economy is the lack of "a mechanism of some kind to ensure that the exchange value of the money incomes of the factors is always equal in the aggregate to the proportion of current output which would have been the factor's share". Neil Niman, Keynes and the Invisible Hand TheoremSo why then would highly intelligent and disinterested economists revert to a barter model of economy to try to explain something -- unemployment -- that is a distinctive feature of a monetary economy?
The characteristics of a monetary economy: a Keynes–Schumpeter approach
Giancarlo Bertocco, Camb. J. Econ. (2007) 31 (1): 101-122. doi: 10.1093/cje/be
Mainstream monetary theory considers money only as an instrument meant to facilitate trading without having any effect on income or on the evolution of the economic system. The aim of this paper is to elaborate a monetary theory capable of supporting the thesis of money non-neutrality based on the arguments developed by Keynes and Schumpeter. The synthesis of the theories of these two great economists will be formulated starting from the two points which are common in the views of Keynes and Schumpeter. First, in contrast with mainstream theory, Keynes and Schumpeter state that the diffusion of a fiat money induces a radical modification into the way in which the economic system works. Second, when Keynes and Schumpeter describe the reasons why money and financial aggregates are not neutral, they highlight the fundamental role of the credit market and of banks; in contrast with the mainstream theory, they do not consider the credit market as the mirror image of the goods market.